Is This Salary Breakup Is Valid?

Basic: Rs. 5000/-
HRA: Rs. 3500/-
PF: Rs. 780/-
Convey: Rs. 800/-
Medical: Rs. 1400/-
Ch. Edu Rs. 800/-
Special Allowance: Rs. 30000/-
Is the special allowance is much greater than Basic?

dear
it does not seems to be ok.problem is of special allowance ,it should seems to be reasonable but here it does not seems to reasonable.one thing is more ,what is special allowance?
this is the term we are creating our selves,why can not be specific,like medical allowance,education allowance,tiffin allowance,conveyance etc.
this salary breakup will make individual fix under income tax also.
j s malik

This is not wrong in toto. Only a couple of adjustment needed.
1. Basic has to be on or above PF slab - 6500 currently (if this raises, so should your basic) - You must have ceiling for PF contribution established for all employees
2. Special Allowance is subjected to Income Tax always - no exemption at any cost
3. You should not pay any additional incentives apart from Special allowances - all incentives should be bundled with special allowances - Any monthly incentive apart from this will defeat this idea
With all this and carefull planning you can establish that this special allowance is bundle of regular attendance, good performance, good will and retention attempt.
By and large, Malikji's comment is worthwhile. Any CA who sees this pay parameters will immediate charge you FBT on this special allowance.

in my opinion, basic wages should be as per minimum wages act fixed for the state not necessarily above Rs.6500. Special allowance break up is needed.FBT is not payable on any salary component whether it is special allowance or not.

Hi Srini,
Salary component amount should be decided as below:
Basic: 60% of CTC
HRA: 50% of Basic
Coveyance Allowance:800 per month
Rest of the amount you can put in other allowances like Medical, Child Education, Entertainment etc.
I request all Seniors to correct me if i am wrong.
Shikha.

Can you please let me know what are the possible breakup heads under Special allowance?
Net salary 78000 is the maximum pay in our company. We are going to set 10% of net salary as the basic pay. Is it valid? Becasue already we Set Rs. 780 for PF. For all employees, we showed Rs 6500 as Basic in PF office.
How do we break the remaining amount?
Regards
- Srini

Sir,
Can you please help me out to get Right Salary Break Up in Percentage (%) format Which can also be helpful to save Income Tax of the employees of our organization
Thanks & Regards
Keyur

Hi Keyur,
What is your employees min and max salary. Based on that you have to set the salary breakup then only all of them get benifits.
Regards
- Srini